UK airlines set to ask Treasury for extension to Covid loans
Bosses from British Airways, Virgin Atlantic and easyJet are set to ask the Treasury to extend their Covid-19 loans and provide further economic help in light of new restrictions imposed by Boris Johnson last week.
Chief executives from the three airlines will meet with civil servants at the Treasury today to discuss the proposals, after airports this week warned of increasing numbers of passenger cancellations.
Loans taken out with the government’s Covid lending programme are due at the end of next year, however the aviation industry is facing a far longer road to post-Covid economic recovery than most other industries.
The Sunday Telegraph reports that the UK airlines will also raise the prospect of business rates relief with Treasury permanent secretary Charles Roxburgh, after Rishi Sunak failed to announce any new economic support to go along with the new Covid restrictions.
A suite of measures have been brought in as the Omicron variant spreads across the UK, which includes forcing international arrivals to self-isolate until they have a negative PCR test.
Heathrow Airport has warned that passenger numbers in November were 60 per cent lower than pre-pandemic levels and that there were “high cancellations” this week from business travellers concerned about new restrictions imposed worldwide.
“[The] high level of cancellations by business travellers concerned about being trapped overseas because of pre-departure testing shows the potential harm to the economy of travel restrictions,” the airport said
British Airways’ holding company International Airlines Group (IAG), easyJet and Ryanair all received money through the Bank of England’s Covid Corporate Financing Fund, which provided large cash injections for investment grade firms.
IAG received around £300m from the fund in May last year, while Easyjet is believed to have received £500m.
IAG lost £2.49bn in the first nine months of this year, while EasyJet reported last month that it lost £1.13bn in the year to September 2021.
A Treasury spokesperson said: “Senior Treasury officials have regular meetings with companies and trade associations to understand the impact of Covid on their businesses.”